Belgium's Real Estate Prices Surge, Straining Purchasing Power

Discover how rising real estate prices in Belgium are impacting purchasing power, as interest rates remain stagnant. Stay informed.

The real estate market in Belgium is once again experiencing a surge in property prices, putting pressure on purchasing power. After a period of stabilisation and even a slight decrease in prices, the cost of buying a house or flat is on the rise. High mortgage rates and a challenging economic situation had suppressed buyers' appetites last year, leading to a decline in real estate transactions across the country. It was expected that this would result in a drop in prices, but most property prices continued to rise, with Brussels being the only exception.

Belgium's Property Prices Surge, Straining Purchasing Power

According to real estate platform Immoweb, real estate prices across Belgium continued to rise in the second quarter, confirming the upward trend from the first quarter. Interest rates, which had peaked at 3.9% in January after two years of sharp increases, began to decline and stabilised at around 3.4% in the previous quarter. This led to a recovery in purchasing power and an increase in demand at the beginning of the year. The decrease in the stock of homes for sale on the market also contributed to the rise in prices.

Despite the recent price increases, the rise is still below the levels seen in previous years. The national average price per square metre now stands at €2,313, with Wallonia experiencing the strongest growth in property prices. The Brussels market is also showing signs of recovery, with the average cost per square metre reaching €3,320. Flanders saw a more modest increase in prices, with the average price per square metre now at €2,458.

The fluctuation in interest rates and the rise in property prices have put a strain on purchasing power. While interest rates initially led to an increase in household purchasing power, the stabilisation of rates in the second quarter has slowed down this growth. The future decisions of the European Central Bank on interest rates will play a crucial role in determining the future course of borrowing costs and price trends in the real estate market.

The real estate market in Belgium is experiencing a resurgence in property prices, with interest rates and purchasing power playing key roles in shaping the market dynamics. The future decisions of the European Central Bank will be crucial in determining the trajectory of the market in the coming months.